Representative Exceeding Granted Authority – Theory and Practice (article in Liithuanian)

Abstract

Each developed economic system is based on the principle of division of labor and can’t be imagined without the delegation of certain powers to agents. Any economic activity, particularly carried out through legal entity, is not able to function without the party’s right to authorize other persons to negotiate and make contracts on behalf of the principal. Due to the complexity of the economic order it is sometimes difficult to a third party to ascertain whether the agent acts with authority. Therefore legal regulation expands the scope of authority of the representatives beyond the actually granted powers—often the need to check the credentials of the representatives is rejected, when it is obvious from the facts that they have been granted necessary powers.